# SECURITIES AND
EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-Q

(Mark one)

[ X ]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE   
SECURITIES EXCHANGE ACT OF
1934

For the quarterly
period ended September 30, 2004

OR 

[ __ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE    
SECURITIES EXCHANGE ACT
OF 1934

For the transition
period from ____ to ____

Commission file number
0-02517

TOREADOR RESOURCES
CORPORATION(Exact name of registrant as specified in its charter)

|Delaware                                                       |  | 75-0991164                             
|-------------------------------------------------------------- |  | ---------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)

|                                         |  |            |  |  | 
|---------------------------------------- |  | ---------- |  |  | 
|
|(Address of principal executive offices) |  | (Zip Code)

Registrants telephone number, including area code:    (214) 559-3933

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

|Yes X |  | No
|----- |  | --

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange
Act of 1934).

|Yes |  | No X
|--- |  | ----

Indicate the number of shares
outstanding of each of the issuers classes of common stock, as of the latest
practicable date.

|Class                            |  | Outstanding at November 11, 2004
|-------------------------------- |  | --------------------------------
|Common Stock, $0.15625 par value |  | 9,758,719 shares                

---

# TOREADOR RESOURCES
CORPORATION

INDEX

|                                                                        | Page Number
|----------------------------------------------------------------------- | -----------
|                                                                        |            
|PART I. FINANCIAL INFORMATION                                           |            
|                                                                       
|Item 1.  Financial Statements (Unaudited)                              
|                                                                        |            
|Consolidated Balance Sheets (Unaudited)                                 | 1          
|September 30, 2004 and December 31, 2003                                |            
|                                                                       
|Consolidated Statements of Operations (Unaudited)                       | 2          
|Three and Nine Months Ended September 30, 2004 and 2003                 |            
|                                                                        |            
|Consolidated Statements of Cash Flows (Unaudited)                       | 3          
|Three and Nine Months Ended September 30, 2004 and 2003                 |            
|                                                                       
|Notes to Consolidated Financial Statements                              | 4          
|                                                                        |            
|Item 2. Management's Discussion and Analysis of Financial Condition and | 13         
|Results of Operations                                                   |            
|                                                                       
|Item 3. Quantitative and Qualitative Disclosure about Market Risk       | 22         
|                                                                        |            
|Item 4. Controls and Procedures                                         | 22         
|                                                                       
|PART II. OTHER INFORMATION                                             
|                                                                        |            
|Item 1. Legal Proceedings                                               | 23         
|                                                                        |            
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds     | 23         
|                                                                        |            
|Item 3. Defaults Upon Senior Securities                                 | 23         
|                                                                        |            
|Item 4. Submission of Matters to a Vote of Security Holders             | 23         
|                                                                        |            
|Item 5. Other Information                                               | 23         
|                                                                        |            
|Item 6. Exhibits                                                        | 23         
|                                                                        |            
|Signatures                                                              | 25         
|                                                                        |            
|Exhibit Index                                                           | 28         

i

---

# TOREADOR RESOURCES
CORPORATION

# CONSOLIDATED BALANCE
SHEETS

(UNAUDITED)

|                                                                               | September 30,
2004 | December 31,
2003
|------------------------------------------------------------------------------ | ------------------ | -----------------
|
|Current assets:                                                                |                    |                  
|Cash and cash equivalents                                                      |                    | $      7,604     
|Accounts and notes receivable                                                  |                    | 3,769            
|Royalty properties held avaliable-for-sale                                     |                    |                 
|Other                                                                          |                    | 2,246            
|                                                                               |                    |                  
|Total current assets                                                           |                    | 13,619           
|                                                                               |                    |                  
|Oil and gas properties, net, using the successful efforts method of accounting |                    | 73,588           
|                                                                               |                    |                  
|Investments in unconsolidated entities                                         |                    | 980              
|Goodwill                                                                       |                    | 3,276            
|Other assets                                                                   |                    | 1,270            
|                                                                               |                    |                  
|Total assets                                                                   |                    | $ 92,733         
|                                                                               |                    |                  
|                                                                               |                    |                  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                           |                    |                  
|Current liabilities:                                                           |                   
|Accounts payable and accrued liabilities                                       |                    | $   7,791        
|Unrealized loss on commodity derivatives                                       |                    | 206              
|Current portion of long-term debt                                              |                    |                 
|Income taxes payable                                                           |                    | 3,926            
|                                                                               |                    |                  
|Total current liabilities                                                      |                    | 11,923           
|                                                                               |                    |                  
|Long-term accrued liabilities                                                  |                    | 782              
|Long-term asset retirement obligation                                          |                    | 1,854            
|Deferred tax liability                                                         |                    | 9,840            
|Convertible subordinated notes                                                 |                    | 7,500            
|Convertible subordinated debenture                                             |                    | 2,160            
|                                                                               |                    |                  
|Total liabilities                                                              |                    | 34,059           
|                                                                               |                    |                  
|Stockholders' equity:                                                          |                   
|Preferred stock, Series A & A-1, $1.00 par value, 4,000,000 shares             |                    |                  
|authorized; liquidation preference of $8,000,000; 320,000 issued               |                    | 320              
|Common stock, $0.15625 par value, 30,000,000                                   |                    |                  
|shares authorized; 10,366,496 issued and 10,058,544 shares issued              |                    | 1,620            
|Capital in excess of par value                                                 |                    | 34,862           
|Retained earnings                                                              |                    | 24,685           
|Accumulated other comprehensive income                                         |                    | (279)            
|                                                                               |                    |                  
|                                                                               |                    | 61,208           
|                                                                               |                    |                  
|Treasury stock at cost:                                                        |                   
|721,027 shares                                                                 |                    | (2,534           
|                                                                               |                    |                  
|Total stockholders' equity                                                     |                    | 58,674           
|                                                                               |                    |                  
|Total liabilities and stockholders' equity                                     |                    | $ 92,733         
|                                                                               |                    |                  

1

---

# TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)

|                                                         | Three Months Ended
September 30, | Nine Months Ended
September 30, |  
|-------------------------------------------------------- | -------------------------------- | ------------------------------- | -
|
|
|Revenues:                                                |                                  |                                 |  
|Oil and gas sales                                        |                                  | $   5,631                       |  
|Lease bonuses and rentals                                |                                  |                                |  
|                                                         |                                  |                                 |  
|Total revenues                                           |                                  | 5,631                           |  
|                                                         |                                  |                                 |  
|Costs and expenses:                                      |                                 
|Lease operating                                          |                                  | 1,603                           |  
|Exploration and acquisition                              |                                  | 432                             |  
|Depreciation, depletion and amortization                 |                                  | 954                             |  
|Reduction in force                                       |                                  |                                |  
|General and administrative                               |                                  | 1,081                           |  
|                                                         |                                  |                                 |  
|Total costs and expenses                                 |                                  | 4,070                           |  
|                                                         |                                  |                                 |  
|                                                         |                                  |                                 |  
|Operating income (loss)                                  |                                  | 1,561                           |  
|                                                         |                                  |                                 |  
|Other income (expense)                                   |                                 
|Equity in gains (losses) of unconsolidated   investments |                                  | 74                              |  
|Gain on sale of properties and other assets              |                                  | 35                              |  
|Foreign currency exchange gain (loss)                    |                                  | (3                              | )
|Interest and other income                                |                                  | 87                              |  
|Interest expense                                         |                                  | (313                            | )
|                                                         |                                  |                                 |  
|Total other income (expense)                             |                                  | (120                            | )
|                                                         |                                  |                                 |  
|                                                         |                                  |                                 |  
|Income before taxes                                      |                                  | 1,441                           |  
|Provision (benefit) for income taxes                     |                                  | (364                            | )
|                                                         |                                  |                                 |  
|Income from continuing operations                        |                                  | 1,805                           |  
|Income from discontinued operations, net of tax          |                                  | 81                              |  
|                                                         |                                  |                                 |  
|Net income                                               |                                  | 1,886                           |  
|Less: dividends on preferred shares                      |                                  | 180                             |  
|                                                         |                                  |                                 |  
|Income available to common shares                        |                                  | $     1,706                     |  
|                                                         |                                  |                                 |  
|Basic income per share                                   |                                  | $    0.18                       |  
|                                                         |                                  |                                 |  
|Diluted income per share                                 |                                  | $    0.15                       |  
|                                                         |                                  |                                 |  
|Weighted average shares outstanding                      |                                 
|Basic                                                    |                                  | 9,593                           |  
|Diluted                                                  |                                  | 13,369                          |  

2

---

# TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

|                                                                                            | Three Months Ended
September 30, | Nine Months Ended
September 30, |  
|------------------------------------------------------------------------------------------- | -------------------------------- | ------------------------------- | -
|
|
|Cash flows from operating activities:                                                       |                                  |                                 |  
|Net income                                                                                  |                                  | $   1,886                       |  
|Adjustments to reconcile net income to net cash           provided by operating activities: |                                  |                                 |  
|Depreciation, depletion and amortization                                                    |                                  | 1,322                           |  
|Gain on sale of properties                                                                  |                                  | (35                             | )
|Realized (gain) loss on foreign currency           transactions                             |                                  | 3                               |  
|Unrealized (gains) losses on commodity          derivatives                                 |                                  | (97                             | )
|Equity in (gains) losses of unconsolidated           investments                            |                                  | (74                             | )
|                                                                                            |                                  |                                 |  
|Cash flows from operating activities before          changes in working capital             |                                  | 3,005                           |  
|                                                                                            |                                  |                                 |  
|Decrease (increase) in operating assets:                                                    |                                  |                                 |  
|Accounts and notes receivable                                                               |                                  | 345                             |  
|Income taxes receivable                                                                     |                                  |                                |  
|Other current assets                                                                        |                                  | 785                             |  
|Other assets                                                                                |                                  | (1                              | )
|Increase (decrease) in operating liabilities:                                               |                                  |                                 |  
|Accounts payable and accrued liabilities                                                    |                                  | 2,033                           |  
|Income taxes payable                                                                        |                                  | (3,297                          | )
|Deferred tax liabilities                                                                    |                                  | (2                              | )
|Other                                                                                       |                                  |                                |  
|                                                                                            |                                  |                                 |  
|Net cash provided by (used in) operating                  activities                        |                                  | 2,868                           |  
|                                                                                            |                                  |                                 |  
|Cash flows from investing activities:                                                       |                                  |                                 |  
|Expenditures for oil and natural gas properties                                             |                                  | (6,671                          | )
|Proceeds from the sale of oil and natural gas   properties                                  |                                  | 7                               |  
|Proceeds from the sale of marketable securities                                             |                                  |                                |  
|Investment in  and advances to unconsolidated   entities, net                               |                                  | (505                            | )
|                                                                                            |                                  |                                 |  
|Net cash provided by (used in) investing                  activities                        |                                  | (7,169                          | )
|                                                                                            |                                  |                                 |  
|Cash flows from financing activities:                                                       |                                  |                                 |  
|Payment for debt issuance costs                                                             |                                  | (1,195                          | )
|Borrowings under revolving credit arrangements                                              |                                  |                                |  
|Repayments under revolving credit arrangements                                              |                                  |                                |  
|Proceeds from issuance of stock, net                                                        |                                  | 390                             |  
|Issuance of preferred stock                                                                 |                                  |                                |  
|Proceeds from issuance of convertible subordinated   notes                                  |                                  | 7,500                           |  
|Payments of preferred dividends                                                             |                                  | (180                            | )
|                                                                                            |                                  |                                 |  
|Net cash provided by (used in) financing                  activities                        |                                  | 6,515                           |  
|                                                                                            |                                  |                                 |  
|Net increase (decrease) in cash and cash equivalents                                        |                                  | 2,214                           |  
|Effects of foreign currency translation on cash and cash equivalents                        |                                  | (1,697                          | )
|Cash and cash equivalents, beginning of period                                              |                                  | 7,087                           |  
|                                                                                            |                                  |                                 |  
|Cash and cash equivalents, end of period                                                    |                                  | $   7,604                       |  
|                                                                                            |                                  |                                 |  

3

---

TOREADOR RESOURCES
CORPORATION

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)

NOTE 1  BASIS OF
PRESENTATION

You
should read these consolidated unaudited financial statements along with the consolidated
financial statements and notes in the 2003 Annual Report on Form 10-K of Toreador
Resources Corporation (the Company, Toreador, we, us, our) filed with the
Securities and Exchange Commission. In our opinion, the information furnished herein
reflects all normal nonrecurring adjustments necessary for a fair presentation of the
results of these interim periods.

Unless
otherwise noted, amounts reported in tables are in thousands, except per share and product
per unit data.

NOTE 2 
DISCONTINUED OPERATIONS

In
January 2004, we sold our U.S. mineral and royalty assets to Black Stone Acquisitions
Partners I, L.P. (the Royalty Sale). We retained all of our working-interest
properties. From the approximate $45.0 million cash consideration that we received, we
discharged our outstanding credit facilities in full and placed approximately $8.0 million
in a tax-deferred escrow account for a possible like-kind exchange. The escrow account was
designed to comply with the like-kind exchange provisions of Section 1031 of the Internal
Revenue Code of 1986, as amended, which permits the deferral of gains from a sale of
assets if specific like-kind exchange criteria are met. We were unable to acquire
working-interests satisfactory to the Companys long-term business objectives that
would comply with the like-kind exchange criteria; therefore, the $8.0 million was
transferred to our general operating fund.

NOTE 3 
COMPREHENSIVE INCOME

The following table presents the
components of comprehensive income, net of related tax:

|                                                      |  |          |  
|----------------------------------------------------- |  | -------- | -
|
|
|Income avaliable to common shares                     |  | $  1,706 |  
|Foreign currency translation adjustment               |  | 53       |  
|Change in fair value of avaliable-for-sale securities |  | (14      | )
|                                                      |  |          |  
|Comprehensive income                                  |  | $  1,745 |  
|                                                      |  |          |  

NOTE 4  RECENTLY
ADOPTED ACCOUNTING PRONOUNCEMENTS

On
August 15, 2001, the FASB issued Statement No. 143, Accounting for Asset Retirement
Obligations (Statement 143). We adopted Statement 143 on January 1, 2003. Upon
adoption of Statement 143, we recorded an increase to Property and Equipment and an
offsetting entry to Asset Retirement Obligations of approximately $1,690,000 and
$1,716,000, respectively, as a result of the Company separately accounting for salvage
values and recording the estimated fair value of its plugging and abandonment obligation
on the balance sheet. The impact of adopting Statement 143 was determined to be
immaterial. We do not expect the effects of adopting Statement 143 to have a material
impact on our financial position or results of operations in future years.

4

---

TOREADOR RESOURCES
CORPORATION

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)

The
following table describes our asset retirement liability as of the nine months ended
September 30, 2004 and 2003:

|                                            | 2004 | 2003  
|------------------------------------------- | ---- | ------
|Asset retirement obligation January 1       |      | $1,781
|Asset retirement accretion expense          |      | 79    
|Less: plugging cost                         |      | (4    
|Less: property sold                         |      | (2    
|
|Asset retirement obligation at September 30 |      | $1,854
|

In
July 2002, the FASB issued Statement No. 146, Accounting for Costs Associated with Exit or
Disposal Activities (Statement 146). Statement 146 requires that a liability
for costs associated with an exit or disposal activity should be initially recognized when
it is incurred. Examples of costs included under Statement 146 include one-time
termination benefits, costs to consolidate or close facilities and costs to relocate
employees. On June 17, 2003, Toreador committed to the termination of four employees. Two
engineers, one geologist and one part-time employee were terminated in an effort to reduce
general and administrative costs. On February 2, 2004, we committed to the termination of
two landmen as a result of the Royalty Sale in January 2004. Total severance expense and
liability for the nine months ended September 30, 2004, were approximately $116,000 and
zero, respectively. The following table provides a reconciliation of the liability:

|Exit Cost or Disposal Activity             | Amount
|------------------------------------------ | ------
|Employee severance liability June 17, 2003 |       
|Cost incurred                              |       
|Adjustments                                |       
|Less: Payroll payments                     |       
|
|Severance liability September 30, 2004     |       

In
December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based Compensation
 Transition and Disclosure (Statement 148). Statement 148 provides
alternative methods of transition to the fair value method of accounting proscribed by
FASB Statement No. 123, Accounting for Stock-Based Compensation (Statement
123). Statement 148 also amends the disclosure provisions of Statement 123 and
Accounting Principles Board Opinion No. 28, Interim Financial Reporting, to require
disclosure in the summary of significant accounting policies of the effects of an
entitys accounting policy with respect to stock-based employee compensation on
reported net income and earnings per share in annual and interim financial statements.
Statement 148 does not require companies to account for employee stock options under the
fair value method. We do not anticipate adopting the fair value method of accounting for
stock-based compensation; however, we have adopted the disclosure provisions of Statement
148 in this filing. Net income would have been adjusted for the pro forma amounts as
follows:

5

---

TOREADOR RESOURCES
CORPORATION

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)

|                                                    | Three Months EndedSeptember 30, | Nine Months EndedSeptember 30, | 
|--------------------------------------------------- | ------------------------------- | ------------------------------ | 
|
|
|Income, applicable to common shares, as reported    |                                 | $  1,706                       | 
|Basic earnings per share reported                   |                                 | 0.18                           | 
|Diluted earnings per share reported                 |                                 | 0.15                           | 
|Stock-based compensation costs under the intristic  |                                 |                                | 
|value method included in net income                 |                                 |                                | 
|reported, net of related tax                        |                                 |                               | 
|Pro-forma stock-based compensation costs under the  |                                 |                                | 
|fair value method, net of related tax               |                                 | 35                             | 
|Pro-forma income applicable to common shares,       |                                 |                                | 
|as under the fair-value method                      |                                 | 1,671                          | 
|Pro-forma basic earnings per share under the fair   |                                 |                                | 
|value method                                        |                                 | 0.17                           | 
|Pro-forma diluted earnings per share under the fair |                                 |                                | 
|value method                                        |                                 | 0.15                           | 

NOTE 5  GEOGRAPHIC
OPERATING SEGMENT INFORMATION

We
have operations in only one industry segment, the oil and gas exploration and production
industry. We are structured along geographic operating segments or regions. As a result,
we have reportable operations in the United States, France and Turkey. Geographic
operating segment income tax expenses have been determined based on statutory rates
existing in the various tax jurisdictions where we have oil and natural gas producing
activities.

The
following tables provide the geographic operating segment data required by Statement of
Financial Accounting Standards No. 131, Disclosure about Segments of an Enterprise
and Related Information.

6

---

TOREADOR RESOURCES
CORPORATION

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)

|                                         | Three Months Ended September 30,
|---------------------------------------- | --------------------------------
|
|
|
|Revenues:                                |                                 
|Oil and gas sales                        |                                 
|                                         |                                 
|Lease bonus and rentals                  |                                 
|                                         |                                 
|Total revenues                           |                                 
|                                         |                                 
|Cost and expenses:                       |                                 
|Lease operating                          |                                 
|Exploration and acquisition              |                                 
|Depreciation, depletion and              |                                 
|amortization                             |                                 
|General and administrative               |                                 
|                                         |                                 
|Total costs and expenses                 |                                 
|                                         |                                 
|                                         |                                 
|Operating income (loss)                  |                                 
|                                         |                                 
|Other income (expense)                   |                                 
|Equity in gains (losses) of              |                                 
|unconsolidated investments               |                                 
|Gain (loss) on sale of properties        |                                 
|Foreign currency exchange gain (loss)    |                                 
|Interest & other income (expense)(1)     |                                 
|Interest expense(1)                      |                                 
|                                         |                                 
|Total other income (expense)             |                                 
|                                         |                                 
|                                         |                                 
|Income (loss) before taxes               |                                 
|                                         |                                 
|Provision (benefit) for income taxes     |                                 
|                                         |                                 
|Income (loss) from continuing operations |                                 
|                                         |                                 
|Income from discontinued operations,     |                                 
|net of tax(2)                            |                                 
|                                         |                                 
|Net income (loss)                        |                                 
|                                         |                                 
|Dividends on preferred shares            |                                 
|                                         |                                 
|Total assets(1)                          |                                 
|                                         |                                 

---

(1)    Interest income and expense and total consolidated assets reflect the effect of
          intersegment eliminations.          
(2)    All results relating to the mineral and royalty properties are required to be
          disclosed as discontinued operations.                     Please see Item 2 
          Managements Discussion and Analysis of Financial Condition and Results of Operations                     under Results of Operations for a more detailed
          description.

7

---

TOREADOR RESOURCES
CORPORATION

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)

|                                         | Nine Months Ended September 30,
|---------------------------------------- | -------------------------------
|
|
|
|Revenues:                                |                                
|Oil and gas sales                        |                                
|                                         |                                
|Lease bonus and rentals                  |                                
|                                         |                                
|Total revenues                           |                                
|                                         |                                
|Cost and expenses:                       |                                
|Lease operating                          |                                
|Exploration and acquisition              |                                
|Depreciation, depletion and              |                                
|amortization                             |                                
|Reduction in force                       |                                
|General and administrative               |                                
|                                         |                                
|Total costs and expenses                 |                                
|                                         |                                
|                                         |                                
|Operating income (loss)                  |                                
|                                         |                                
|Other income (expense)                   |                                
|Equity in gains (losses) of              |                                
|unconsolidated investments               |                                
|Gain on sale of properties               |                                
|Foreign currency exchange gain (loss)    |                                
|Interest and other income (expense)(1)   |                                
|Interest expense(1)                      |                                
|                                         |                                
|Total other income (expense)             |                                
|                                         |                                
|                                         |                                
|Income (loss) before taxes               |                                
|                                         |                                
|Provision (benefit) for income taxes     |                                
|                                         |                                
|Income (loss) from continuing operations |                                
|                                         |                                
|Income from discontinued operations,     |                                
|net of tax(2)                            |                                
|                                         |                                
|Net income (loss)                        |                                
|                                         |                                
|Dividends on preferred shares            |                                
|                                         |                                
|Total assets(1)                          |                                
|                                         |                                

---

(1)    Interest income and expense and total consolidated assets reflect the effect of
          intersegment eliminations.          
(2)    All results relating to the mineral and royalty properties are required to be
          disclosed as discontinued operations.                     Please see Item 2 
          Managements Discussion and Analysis of Financial Condition and Results of Operations                     under Results of Operations for a more detailed
          description.

8

---

TOREADOR RESOURCES
CORPORATION

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)

NOTE 6  DERIVATIVE
FINANCIAL INSTRUMENTS

We
utilize commodity derivative instruments as part of our risk management program. These
commodity derivatives are not designated as hedges. These transactions are generally
structured as either swaps or collar contracts. A swap has the effect of an outright sale
at a specific price. A collar has the effect of creating a sale only if the price falls
below a floor price or exceeds a ceiling price. These instruments reduce the effect of the
price fluctuations of the commodities we produce and sell and support our annual capital
budget and expenditure plans. When we had our senior credit facilities, these instruments
protected the amounts required for servicing outstanding debt and maximized the funds
available under those credit facilities. The trading party that represents the other side
of each of these transactions is known as a counterparty. The counterparty of
our United States transactions is Coral Energy Holdings, L.P., an affiliate of Royal
Dutch/Shell. Currently we do not have any commodity derivative instruments for our foreign
production.

The
following table lists our open natural gas derivative contracts as of September 30, 2004.
All contracts are based on NYMEX pricing. We estimated the fair value of the option
agreement at September 30, 2004, from quotes by the counterparty representing the amounts
we would expect to receive or pay to terminate the agreements on that date. We estimated
the fair value of the swap agreement based on the difference between the strike prices and
the forward NYMEX prices for each determination period multiplied by the notional volume
for each period.

|ContractType |  | EffectiveDate |  | TerminationDate |  | NotionalVolume perMonth(MMBtu)(1) |  | AggregateVolume(MMBtu) |  | Strike Priceper MMBtu |  | Fair Value-Gain/(Loss)September 30,2004 | 
|------------ |  | ------------- |  | --------------- |  | --------------------------------- |  | ---------------------- |  | --------------------- |  | --------------------------------------- | 
|             |  |               |  |                 |  |                                   |  |                        | 
|Put Option   |  | November 2004 |  | December 2004   |  | 50,000                            |  | 100,000                |  | $ 3.250               |  | $                                     
|             |  |               |  |                 |  |                                   | 
|Call Option  |  | November 2004 |  | December 2004   |  | 50,000                            |  | 100,000                |  | $ 5.275               |  | $    (205,500)                         

---

(1)    MMBtu - Million British thermal units.

NOTE 7  LONG-TERM
DEBT

In
July 2004, we sold to certain institutional investors pursuant to a private offering $7.5
million aggregate principal amount of Convertible Subordinated Notes (the
Notes) due June 30, 2009. The Notes bear interest at the rate of 7.85% per
annum and are convertible into shares of common stock at a conversion price of $8.20 per
share. The Company may force conversion of the Notes on or after January 22, 2005, if the
closing price of Toreadors common stock is greater than $14.35 for the 30
consecutive trading days prior to the date of the Companys notice of conversion.
Toreador may also elect to prepay the Notes at any time for the outstanding principal
amount plus a 2% premium and accrued and unpaid interest and the issuance of warrants
exercisable into the same number of shares of common stock as the Notes were convertible
into before the prepayment and retirement of the Notes at an exercise price equal to the
conversion price immediately prior to the prepayment and retirement of the Notes. We
intend to use the net proceeds of the offering to accelerate our oil development program
in Frances Paris Basin and for general corporate purposes.

9

---

TOREADOR RESOURCES
CORPORATION

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)

At
the end of 2003, we had two senior borrowing facilities. The Bank of Texas facility (the
Texas Facility) had borrowings outstanding of approximately $17.0 million at
December 31, 2003. We discharged the Texas Facility in January 2004 with a portion of the
proceeds from the Royalty Sale.

The
revolving credit facility with Barclays Bank, Plc (the Barclays Facility) had
approximately $11.8 million outstanding at December 31, 2003. We discharged the Barclays
Facility in January 2004 with a portion of the proceeds from the Royalty Sale. Under the
terms of the Warrant Buyback Letter dated May 19, 2003, we were required to buyback
500,000 outstanding warrants from Barclays for the sum of $100,000 upon final settlement
of the Barclays Facility. Additionally, we were required to make a final settlement
payment of $925,000 less the amounts of any payments made to Barclays for interim fees due
before the final settlement under the terms of the Settlement Fee Letter dated May 19,
2003. The settlement payment amount after deduction of the interim fees paid to Barclays
was approximately $806,000.

NOTE 8  LITIGATION

Karak
Petroleum. Madison Oil Company (Madison), a wholly owned subsidiary of
Toreador and its wholly owned subsidiary Trans-Dominion Holdings Ltd. were named as
defendants in a complaint filed in Alberta, Canada, in 1999. The complaint arose from a
dispute between Karak Petroleum (Karak), a subsidiary of Trans-Dominion
Holdings, and the operator of an exploratory well in Pakistan in 1994 in which Karak was a
joint interest partner. The plaintiffs alleged that they were owed approximately $500,000.
On August 7, 2002, we reached an agreement with the plaintiffs in this matter. Under the
terms of the agreement, we agreed to pay the plaintiffs $400,000 for full release of
liability. Written documentation reflecting the foregoing was finalized on August 29,
2002. The agreement required that we remit the $400,000 in two installments. The first
installment of $50,000 was paid on August 29, 2002, and the remaining $350,000 was to be
paid by February 3, 2003. This liability was recorded in 2002. In February 2003, the
plaintiffs agreed to accept the $350,000 in monthly installments payable at the beginning
of each month beginning February 2003. Payments totaling $105,000 were made during 2003.
The remaining balance was paid in January 2004.

Turkish
Registered Capital. Under the existing Petroleum Law of Turkey, capital that is invested
by foreign companies in projects such as oil and natural gas exploration can be registered
with the General Directorate of Petroleum Affairs, thereby qualifying for protection
against adverse changes in the exchange rate between the time of the initial investment
and the time such capital is repatriated out of Turkey. Since 1997 the Turkish government
has suspended such protection for repatriated capital. As holder of more than $50 million
of registered capital, we have filed suit in Turkey to attempt to restore the exchange
rate protections afforded under the law. No amounts have been accrued related to this
contingency. Holders of Madison common stock, on the anniversary date of the merger, have the right to
receive, in cash or our common stock, 30% of certain potential payments that may be
received from the Turkish government for the protection of repatriated capital. In March
2002 a lower level court ruled in favor of Madison. The ruling was subject to automatic
appeal that was heard in December 2002. The appellate court reversed the lower
courts ruling. We have appealed the ruling of the appellate court and are
waiting on a final determination. The current appeal is the last appeal that can be made
by either side in this case. We cannot predict the outcome of this matter.

10

---

TOREADOR RESOURCES
CORPORATION

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)

NOTE 9  EARNINGS
PER COMMON SHARE

The following table reconciles the
numerators and denominators of the basic and diluted earnings per ordinary share
computation:

|                                                             | Three Months Ended
September 30, | Nine Months Ended
September 30, | 
|------------------------------------------------------------ | -------------------------------- | ------------------------------- | 
|
|
|Basic earnings per share:                                    |                                  |                                 | 
|Numerator:                                                   |                                  |                                 | 
|Income from continuing operations, net of tax                |                                  | $ 1,805                         | 
|Income from discontinued operations, net of tax              |                                  | 81                              | 
|                                                             |                                  |                                 | 
|Net income                                                   |                                  | 1,886                           | 
|Less: dividends on preferred shares                          |                                  | 180                             | 
|                                                             |                                  |                                 | 
|Income applicable to common shares                           |                                  | $ 1,706                         | 
|                                                             |                                  |                                 | 
|Denominator:                                                 |                                  |                                 | 
|Common shares outstanding                                    |                                  | 9,593                           | 
|                                                             |                                  |                                 | 
|Basic earnings per share from:                               |                                  |                                 | 
|Continuing operations                                        |                                  | $ 0.17                          | 
|Discontinued operations                                      |                                  | 0.01                            | 
|                                                             |                                  |                                 | 
|Income per share applicable to common           shares       |                                  | $ 0.18                          | 
|                                                             |                                  |                                 | 
|Diluted earnings per share:                                  |                                  |                                 | 
|Numerator:                                                   |                                  |                                 | 
|Income from continuing operations,           net of tax      |                                  | $ 1,805                         | 
|Income from discontinued operations,            net of tax   |                                  | 81                              | 
|                                                             |                                  |                                 | 
|Net income                                                   |                                  | 1,886                           | 
|Plus: interest on notes and debenture, net            of tax |                                  | 96                              | 
|Less: dividends on preferred shares                          |                                  | N/A(2)                          | 
|                                                             |                                  |                                 | 
|Income applicable to common shares                           |                                  | $ 1,982                         | 
|                                                             |                                  |                                 | 
|Denominator:                                                 |                                  |                                 | 
|Common shares outstanding                                    |                                  | 9,593                           | 
|Common stock options and warrants                            |                                  | 750                             | 
|Conversion of preferred shares                               |                                  | 2,000                           | 
|Conversion of notes payable                                  |                                  | 706                             | 
|Conversion of debenture                                      |                                  | 320                             | 
|                                                             |                                  |                                 | 
|Diluted shares outstanding                                   |                                  | 13,369                          | 
|                                                             |                                  |                                 | 
|Basic earnings per share from:                               |                                  |                                 | 
|Continuing operations                                        |                                  | $ 0.14                          | 
|Discontinued operations                                      |                                  | 0.01                            | 
|                                                             |                                  |                                 | 
|Income per share applicable to                 common shares |                                  | $ 0.15                          | 
|                                                             |                                  |                                 | 

---

(1)    Because we assume that the debenture was antidilutive, interest, net of tax, was paid and should not be added back to earnings.          
(2)    Because we assumed that the preferred shares were converted into common shares, there would have been no dividends paid.          
(3)    The conversion of the preferred shares and debenture would have been antidilutive.  Therefore, no conversion is assumed for this           calculation.

11

---

TOREADOR RESOURCES
CORPORATION

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)

NOTE 10  INCOME
TAXES

We
use the liability method to account for income taxes. Under this method a tax provision is
made for both current and deferred taxes for the period. The components of the provision
are then recorded as a net asset or liability for the current and deferred amounts.

For
the nine months ended September 30, 2004, a benefit for income taxes of $896,000 was
recognized for continuing operations. A tax provision of $10.2 million was recorded as
part of income from discontinued operations, net of tax. The net tax provision was $9.3
million with a corresponding increase in the current and deferred tax liabilities.

NOTE 11  RELATED
PARTY TRANSACTIONS

On
June 14, 2004, we issued stock options to purchase 29,500 shares of our common stock to David M.
Brewer. Mr. Brewer currently serves as a director for Toreador. The options were granted in
payment to Mr. Brewer for consulting services related to our international activities. The
options were granted pursuant to the Toreador Resources Corporation 2002 Stock Option
Plan. The exercise price was $5.50 per share. The options expire no later than 10 years
from the date of issuance. We recorded a charge to general and administrative costs of
$58,000 representing the cost of options calculated by the Black-Scholes model in the second quarter of 2004.

12

---

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

DISCLOSURES REGARDING
FORWARD-LOOKING STATEMENTS

Certain
matters discussed under Managements Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this report may constitute
forward-looking statements for purposes of the Securities Act of 1933, and the
Securities Exchange Act of 1934 and, as such, may involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance or
achievements to be materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. When used in this report, the
words anticipates, estimates, plans,
believes, continues, expects, projections,
forecasts, intends, may, might,
could, should, and similar expressions are intended to be among
the statements that identify forward-looking statements. Various factors that could cause
the actual results, performance or achievements to differ materially from our expectations
are disclosed in this report (Cautionary Statements), including, without
limitation, those statements made in conjunction with the forward-looking statements
included under the caption identified above and otherwise herein. All written and oral
forward-looking statements attributable to us are expressly qualified in their entirety by
the Cautionary Statements.

EXECUTIVE OVERVIEW

The
Companys financial and operating performance since the beginning of the third quarter of
2004 included the following highlights:

| | Cash flow from operating activities before changes in working capital increased to $3.0 million.
|- | ------------------------------------------------------------------------------------------------

| | The development program in our French Neocomian fields that includes three sidetrack wells and three deviated wells began in October 2004.
|- | ------------------------------------------------------------------------------------------------------------------------------------------

| | The Ayazli #1 well in the Black Sea of Turkey resulted in a natural gas discovery in August 2004, with tested flow rates of approximately  15 million cubic feet
              per day.  The well is currently shut-in, awaiting further field development.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Lease  operating  expenses were further  reduced to $1.6 million in the third  quarter 2004, a 30% decline from lease operating expenses of $2.3 million in the
              third quarter of 2003.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net income was $1.9 million in the third quarter 2004, a 73% increase from net income of $1.1 million in the third quarter of 2003.
|- | -----------------------------------------------------------------------------------------------------------------------------------

The
Company recorded income applicable to common shares of $1.7 million ($0.15 per diluted
share) for the three months ended September 30, 2004, compared with $946,000 ($0.09 per
diluted share) for the year-ago period.

LIQUIDITY AND CAPITAL
RESOURCES

This
section should be read in conjunction with Note 7 in the Notes to Consolidated Financial
Statements included in this filing.

For
the first nine months of 2004, net cash used in operations was $299,000, compared with
$7.1 million provided by operations for the year-ago period. During the nine months ended
September 30, 2004, we received $42.0 million in proceeds from sales of property and
equipment, net of expenses. We expect that cash flow provided by operating income, plus
depreciation, for the remaining three months of 2004 will be approximately $3.0 million.

13

---

At
the end of 2003, we had two senior borrowing facilities. The Bank of Texas facility (the
Texas Facility) had borrowings outstanding of approximately $17.0 million at
December 31, 2003. We discharged the Texas Facility in January 2004.

The
revolving credit facility with Barclays Bank, Plc (the Barclays Facility) had
approximately $11.8 million in borrowings outstanding at December 31, 2003. We also
discharged the Barclays Facility in January 2004. Under the terms of the Warrant Buyback
Letter dated May 19, 2003, we were required to buyback 500,000 outstanding warrants from
Barclays for the sum of $100,000 upon final settlement of the Barclays Facility.
Additionally, we were required to make a final settlement payment of $925,000 less the
amounts of any payments made to Barclays for interim fees due before the final settlement
under the terms of the Settlement Fee Letter dated May 19, 2003. The settlement payment
amount after deduction of the interim fees paid to Barclays was approximately $806,000.

In
July 2004, we sold to certain institutional investors pursuant to a private offering $7.5
million aggregate principal amount of Convertible Subordinated Notes (the
Notes) due June 30, 2009. The Notes bear interest at the rate of 7.85% per
annum and are convertible into shares of common stock at a conversion price of $8.20 per
share. The Company may cause the Notes to be converted on or after January 22, 2005, if the
closing price of Toreadors common stock is greater than $14.35 for the 30
consecutive trading days prior to the date of the Companys conversion notice.
Toreador may also elect to prepay the Notes at any time for the outstanding principal
amount plus a 2% premium and accrued and unpaid interest and the issuance of warrants
exercisable into the same number of shares of common stock as the Notes were convertible
into before the prepayment and retirement of the Notes at an exercise price equal to the
conversion price immediately prior to the prepayment and retirement of the Notes. We
intend to use the net proceeds of the offering to accelerate our oil development program
in Frances Paris Basin and for general corporate purposes.

Toreador
had 160,000 shares of nonvoting Series A Convertible Preferred Stock outstanding at September
30, 2004. At the option of the holder, the Series A Convertible Preferred Stock may be
converted into common shares at a price of $4.00 per common share (conversion would amount
to 1,000,000 Toreador common shares). The Series A Convertible Preferred Stock accrues
dividends at an annual rate of $2.25 per share payable quarterly in cash. At any time
on or after December 1, 2004, we may elect to redeem for cash any or all shares of Series A
Convertible Preferred Stock. The optional redemption price per share is the sum of (1)
$25.00 per share of the Series A Convertible Preferred Stock plus (2) any accrued unpaid
dividends, and such sum is multiplied by a declining multiplier. The multiplier is 105%
until November 30, 2005, 104% until November 30, 2006, 103% until November 30, 2007, 102%
until November 30, 2008, 101% until November 30, 2009, and 100% thereafter.

Toreador
had 160,000 shares of nonvoting Series A-1 Convertible Preferred Stock outstanding at September
30, 2004. At the option of the holder, the Series A-1 Convertible Preferred Stock may be
converted into common shares at a price of $4.00 per common share (conversion would amount
to 1,000,000 Toreador common shares). The Series A-1 Convertible Preferred Stock accrues
dividends at an annual rate of $2.25 per share payable quarterly in cash. At any time on
or after November 1, 2007, we may elect to redeem for cash any or all shares of Series A-1
Convertible Preferred Stock. The optional redemption price per share is the sum of (1)
$25.00 per share of the Series A-1 Convertible Preferred Stock plus (2) any accrued unpaid
dividends, and such sum is multiplied by a declining multiplier. The multiplier is 105%
until October 31, 2008, 104% until October 31, 2009, 103% until October 31, 2010, 102%
until October 31, 2011, 101% until October 31, 2012, and 100% thereafter.

Prior to the acquisition of Madison, Madison was party to a convertible debenture
(Debenture) in the amount of $2.16 million payable to PHD Partners LP and due
on March 31, 2006. The general partner of PHD Partners LP is a corporation wholly owned by
David M. Brewer, a director and significant stockholder of Toreador. The original
Debenture bore interest at 10% per annum. As of March 31, 2004, the Debenture was amended
and restated to bear interest at 6% per annum, eliminate Madison's right under certain
circumstances to force a conversion of the principal into shares of Toreador's common stock and
eliminate Madison's ability to repay principal prior to maturity. At the holders option,
the Debenture can be converted into Toreador common stock at a ratio of $6.75 per share. We have
319,962 common shares reserved for issuance related to the conversion of the Debenture.

14

---

We
anticipate that our 2004 capital expenditures budget, excluding any acquisitions we may
make, will be approximately $14.0 to $16.0 million. Capital expenditures through September
30, 2004 were $12.4 million. We intend to fund any remaining amounts to be funded under
our capital expenditures budget from operating cash flow, cash currently on hand along
with the possible use of debt and other types of financings. We anticipate spending most
of our remaining 2004 capital budget on prospects in our foreign inventory. We intend to limit
our activity in France to workovers and development drilling on our existing properties
and exploration work on the Courtenay permit. In Turkey, we anticipate continuing
exploration work on several projects, including an exploratory well on the Calgan
prospect, which we will begin to drill in November.

We
expect to receive future cash flow through production from existing producing properties and
new producing properties that may be discovered through exploration, as well as development properties from existing fields. In addition to the properties described
above, we also may acquire other producing oil and gas assets, which could require the use
of debt or other forms of financing.

Dividends
on our common stock may be declared and paid out of funds legally available when and as
determined by our board of directors. Our policy is to hold and invest corporate funds on
a conservative basis, and, thus, we do not anticipate paying cash dividends on our common
stock in the foreseeable future. The terms of our Series A Convertible Preferred Stock and
our Series A-1 Convertible Preferred Stock prohibit us from paying dividends on the common
stock without the approval of the holders of a majority of the then outstanding shares of
the Series A Convertible Preferred Stock and the Series A-1 Convertible Preferred Stock.
We are prohibited from paying cash dividends on the common stock without the approval of holders of a
majority of the then outstanding Notes.

Dividends
on our Series A Convertible Preferred Stock and Series A-1 Convertible Preferred Stock are
paid quarterly. Cash dividends totaling $540,000 and $346,626 were paid for the nine-month
periods ended September 30, 2004 and 2003, respectively. Future dividends will be paid in
cash at the rate of $180,000 per full calendar quarter. Interest on the Notes issued July
22, 2004 is paid quarterly. Interest paid on the Notes as of September 30, 2004 was
$116,115. Future interest will be paid at the rate of $147,188 per full calendar quarter.

We
believe that sufficient funds will be available from operating cash flow, cash on hand and
future potential financing sources to meet anticipated capital budget requirements and fund potential
acquisitions in 2004. The following table sets forth our contractual obligations at
September 30, 2004 for the periods shown:

|       | Due Within
|------ | ----------
|
|Debt   |           
|Leases |           
|       |           
|Total  |           
|       |           

CRITICAL ACCOUNTING
POLICIES

We
did not have any changes in our critical accounting policies or in our significant
accounting estimates during the nine months ended September 30, 2004. Please see our
Annual Report on Form 10-K for the year ended December 31, 2003, for a detailed discussion
of our critical accounting policies.

15

---

RESULTS OF OPERATIONS

COMPARISON OF THE THREE
MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

The following tables present
production and average unit prices and costs for the geographic segments indicated:

|              | Three Months Ended
September 30, |     |  | Three Months Ended
September 30,
|------------- | -------------------------------- | --- |  | --------------------------------
|
|Production    |                                  |     |  |                                 
|Oil (MBbls):  |                                  |     |  |                                 
|United States |                                  | 16  |  | 46                              
|France        |                                  | 108 |  | 96                              
|Turkey        |                                  | 20  |  | 25                              
|              |                                  |     |  |                                 
|Total         |                                  | 144 |  | 167                             
|              |                                  |     |  |                                 
|              |                                  |     |  |                                 
|Gas (MMcf):   |                                  |     |  |                                 
|United States |                                  | 154 |  | 352                             
|France        |                                  |    |  |                                
|Turkey        |                                  |    |  |                                
|              |                                  |     |  |                                 
|Total         |                                  | 154 |  | 352                             
|              |                                  |     |  |                                 
|              |                                  |     |  |                                 
|MBOE:         |                                  |     |  |                                 
|United States |                                  | 41  |  | 105                             
|France        |                                  | 108 |  | 96                              
|Turkey        |                                  | 20  |  | 25                              
|              |                                  |     |  |                                 
|Total         |                                  | 169 |  | 226                             
|              |                                  |     |  |                                 

REVENUES

Oil
and gas sales. Oil and natural gas sales, net of hedging gains and losses, remained
constant at $5.6 million from third quarter 2003 to third quarter 2004. French production
increased because the Charmottes 109 well was producing for the full quarter, while U.S. production
decreased due to the Royalty Sale and Turkish production decreased due to natural decline.
For the third quarter 2004, sales were $6.4 million versus $4.6 million for the third quarter 2003.
The average realized oil price for the third quarter of 2004 was $38.24 per barrel versus
$27.17 per barrel for the year-ago period. The average realized gas price in the third
quarter of 2004 was $5.24 per thousand cubic feet (Mcf) versus $4.68 per Mcf in the third
quarter of 2003.

Lease
bonuses and rentals. We had no lease bonuses and rentals for the third quarter of 2004 due
to the Royalty Sale in January 2004, compared with $4,000 recorded in the third quarter of
2003.

EXPENSES

Lease
operating. Lease operating expenses decreased $651,000, or 30%. The reduction is
attributable to more cost-efficient operations in France.  In addition, an adjustment was made in
the third quarter of 2003 to reclassify Turkish production taxes as lease operating
expense rather than as a deduction from oil and gas sales.

Exploration
and acquisition. Exploration and acquisition expenses for the third quarter of 2004 were
$432,000, 5% higher than exploration and acquisition expenses of $413,000 in the third
quarter of 2003 due to dry hole and exploratory costs in the United States.

16

---

Depreciation,
depletion and amortization. Third-quarter 2004 depreciation, depletion and amortization
expenses increased $74,000, or 8%, compared with the same period last year due to
additions to oil and gas properties.

General
and administrative. General and administrative expenses increased $373,000, or 53%, for
the third quarter of 2004, compared with the third quarter of 2003. The quarter-to-quarter
increase is the result of 2003 general and administrative costs of $458,000 being
allocated to income from discontinued operations. The total costs, including amounts
classified as discontinued operations, were $1.1 million for the third quarter of 2004,
compared with $1.2 million for the third quarter of 2003. Overall general and
administrative costs were slightly lower on a quarterly comparative basis.

OTHER INCOME AND EXPENSE

Other
income and expense resulted in a net charge to expense of $120,000 for the third quarter
of 2004 versus a net charge to expense of $185,000 for the third quarter of 2003. Other
income increased $65,000, or 35%, in the third quarter of 2004, primarily due to increased
equity in gains of unconsolidated investments compared with the third quarter of
2003.

17

---

DISCONTINUED OPERATIONS

The
following table compares discontinued operations for the third quarters ended September
30, 2004 and 2003:

|                                         | Three Months Ended
September 30,
|---------------------------------------- | --------------------------------
|
|
|Revenues:                                |                                 
|Oil and gas sales                        |                                 
|Lease bonuses and rentals                |                                 
|                                         |                                 
|Total revenues                           |                                 
|                                         |                                 
|Costs and expenses:                      |                                 
|Lease operating                          |                                 
|Depreciation, depletion and amortization |                                 
|General and administrative               |                                 
|Interest                                 |                                 
|                                         |                                 
|Total cost and expenses                  |                                 
|                                         |                                 
|Loss on sale of properties               |                                 
|                                         |                                 
|Income before taxes                      |                                 
|Income tax provision (benefit)           |                                 
|                                         |                                 
|Income from discontinued operations      |                                 
|                                         |                                 

Income
from discontinued operations for the third quarter 2004 was $81,000 versus $376,000 for
the third quarter of 2003. The decrease was due to the Royalty Sale in January 2004 (see
Note 2 in Notes to Consolidated Financial Statements).

NET INCOME AVAILABLE TO
COMMON SHARES

For
the third quarter of 2004, we reported income before taxes of $1.4 million, compared
with income before taxes of $1.2 million for the same period in 2003. Third-quarter 2004 income applicable to common shares was $1.7
million versus income applicable to common shares of $946,000 for the third quarter of
2003.

OTHER COMPREHENSIVE INCOME

This
item should be read in conjunction with Note 3 in the Notes to Consolidated Financial
Statements included in this filing.

The
most significant element of comprehensive income, other than net income, is foreign
currency translation. The functional currency of our operations in France is the
Eurodollar, and in Turkey, the functional currency is the Turkish lira. The exchange rates
used to translate the financial position of those operations at September 30, 2004, were
approximately US$1.24 per Eurodollar and US$0.67 per million Turkish lira. The exchange
rates at September 30, 2003, were US$1.15 per Eurodollar and US$0.73 per million Turkish lira.

18

---

COMPARISON OF THE NINE
MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

The following tables present
production and average unit prices and costs for the geographic segments indicated:

|              | Nine Months Ended
September 30, |     |  | Nine Months Ended
September 30,
|------------- | ------------------------------- | --- |  | -------------------------------
|
|Production    |                                 |     |  |                                
|Oil (MBbls):  |                                 |     |  |                                
|United States |                                 | 53  |  | 142                            
|France        |                                 | 291 |  | 284                            
|Turkey        |                                 | 55  |  | 83                             
|              |                                 |     |  |                                
|Total         |                                 | 399 |  | 509                            
|              |                                 |     |  |                                
|              |                                 |     |  |                                
|Gas (MMcf):   |                                 |     |  |                                
|United States |                                 | 421 |  | 1,202                          
|France        |                                 |    |  |                               
|Turkey        |                                 |    |  |                               
|              |                                 |     |  |                                
|Total         |                                 | 421 |  | 1,202                          
|              |                                 |     |  |                                
|              |                                 |     |  |                                
|MBOE:         |                                 |     |  |                                
|United States |                                 | 124 |  | 342                            
|France        |                                 | 291 |  | 284                            
|Turkey        |                                 | 55  |  | 83                             
|              |                                 |     |  |                                
|Total         |                                 | 470 |  | 709                            
|              |                                 |     |  |                                

REVENUES

Oil
and gas sales. Oil and natural gas sales, net of hedging gains and losses, increased $1.7 million for the nine months ended September 30, 2004, from the first nine months of
2003. French production increased due to the addition of the Charmottes 109 well, and U.S.
production decreased due to the Royalty Sale in January 2004. For the nine months ended
September 30, 2004, sales, net of hedging gains and losses, were $14.6 million versus
$13.6 million for the nine months ended September 30, 2003. The average realized oil price
for the nine months ended September 30, 2004, was $33.44 per barrel versus $26.35 per
barrel for the year-ago period. The average realized gas price for the nine months ended
September 30, 2004, was $5.58 per thousand cubic feet (Mcf) versus $5.01 per Mcf for the
nine months ended September 30, 2003.

Lease
bonuses and rentals. Lease bonuses and rentals were $14,000 for the nine months ended
September 30, 2004 and $18,000 for the nine months ended September 30, 2003. The decrease
was due to the Royalty Sale in January 2004.

EXPENSES

Lease
operating. Lease operating expenses were $1.6 million, a 30% reduction from the year-ago period.  Lower workover
expenses in the United States were offset by continuing workover expenses in France, as well as the
increase in the value of the Eurodollar against the U.S. dollar since September 30, 2003.

Exploration
and acquisition. Exploration and acquisition expenses for the nine months ended September
30, 2004 were $984,000, 21% higher than exploration and acquisition expenses of $812,000
for the nine months ended September 30, 2003, due to the expensing of two dry holes in the
United States.

19

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Depreciation,
depletion and amortization. Depreciation, depletion and amortization expenses for the nine
months ended September 30, 2004 rose $155,000, or 6%, due to additions to oil and gas
properties.

General
and administrative. General and administrative expenses increased $1.0 million, or 38%,
for the nine months ended September 30, 2004, compared with the nine months ended September
30, 2003. The year-to-year increase was the result of the reclassification of $1.6 million
of 2003 general and administrative costs as a charge against income from discontinued
operations. Total costs, including amounts classified as discontinued operations, were
$3.8 million for the nine months ended September 30, 2004, compared with $4.2 million for
the nine months ended September 30, 2003. Overall general and administrative costs were
10% lower on a period-to-period comparative basis, primarily as a result of the reduction in force.

OTHER INCOME AND EXPENSE

Other
income and expense resulted in a net credit to income of $3.8 million for the nine months
ended September 30, 2004, versus a net credit to income of $174,000 for the nine months
ended September 30, 2003. Other income increased $3.6 million primarily due to a realized
foreign currency exchange gain. The gain related to the increase in value of the
Eurodollar against the U.S. dollar in connection with the discharge of the Barclays
Facility during the nine months ended September 30, 2004.

20

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DISCONTINUED OPERATIONS

The
following table compares discontinued operations for the nine months ended September 30,
2004 and 2003:

|                                         | Nine Months Ended
September 30,
|---------------------------------------- | -------------------------------
|
|
|Revenues:                                |                                
|Oil and gas sales                        |                                
|Lease bonuses and rentals                |                                
|                                         |                                
|Total revenues                           |                                
|                                         |                                
|Costs and expenses:                      |                                
|Lease operating                          |                                
|Depreciation, depletion and amortization |                                
|General and administrative               |                                
|Interest                                 |                                
|                                         |                                
|Total cost and expenses                  |                                
|                                         |                                
|Gain on sale of properties               |                                
|                                         |                                
|Income before taxes                      |                                
|Income tax provision                     |                                
|                                         |                                
|Income from discontinued operations      |                                
|                                         |                                

Income
from discontinued operations for the nine months ended September 30, 2004 was $18.4
million versus $1.3 million for the same period in 2003. The increase was due to the
Royalty Sale in January 2004 (see Note 2 in Notes to Consolidated Financial Statements).

NET INCOME AVAILABLE TO
COMMON SHARES

For
the nine months ended September 30, 2004, we reported income before taxes of $6.0
million, compared with income before taxes of $2.1 million for the same period in
2003. Income applicable to common shares for the nine months ended September 30, 2004 was $24.7 million
versus $2.1 million for the same period of 2003.

OTHER COMPREHENSIVE INCOME

This
item should be read in conjunction with Note 3 in the Notes to Consolidated Financial
Statements included in this filing.

The
most significant element of comprehensive income, other than net income, is foreign
currency translation. As of December 31, 2003, we had accumulated an unrealized gain of
$4.9 million because the Barclays Facility was denominated in U.S. dollars, whereas the
functional currency of our operations in France is the Eurodollar. In the first quarter
of 2004, we converted this gain from unrealized to realized due to the repayment of the
facility. In Turkey, the functional currency is the Turkish lira. The exchange rates used
to translate the financial position of those operations at September 30, 2004, were
approximately US$1.24 per Eurodollar and US$0.67 per million Turkish lira. The exchange
rates at September 30, 2003, were US$1.15 per Eurodollar and US$0.73 per million Turkish
lira.

21

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ITEM 3 
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

There
have been no material changes from the information provided in Item 7A of our Annual
Report on Form 10-K for the year ended December 31, 2003.

ITEM 4  CONTROLS
AND PROCEDURES

The
term disclosure controls and procedures is defined in Rule 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, or the Exchange Act. This term refers to
the controls and procedures of a company that are designed to ensure that information
required to be disclosed by a company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized, and reported within the time periods
specified by the Securities and Exchange Commission. Our management, including our Chief
Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our
disclosure controls and procedures as of the end of the period covered by this quarterly
report. Based upon that evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded that our disclosure controls and procedures were effective in all
material respects as of the end of the period covered by this quarterly report.

There
were no changes to our internal control over financial reporting during our last fiscal
quarter that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

22

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PART II. OTHER INFORMATION

ITEM 1  LEGAL
PROCEEDINGS

There
have been no material changes to the information reported under Item 3  Legal
Proceedings of our Annual Report on Form 10-K for the year ended December 31, 2003.

From
time to time, we are named as a defendant in other legal proceedings arising in the normal
course of business. In our opinion, the final judgment, or settlement, if any, which may
be awarded with any other suits or claims would not have a material adverse effect on our
financial position.

ITEM 2  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In
July 2004, we sold to certain institutional investors pursuant to a private offering $7.5
million aggregate principal amount of Convertible Subordinated Notes (the
Notes) due June 30, 2009. The Notes bear interest at the rate of 7.85% per
annum and are convertible into shares of common stock at a conversion price of $8.20 per
share. The Company may force conversion of the Notes on or after January 22, 2005, if the
closing price of Toreadors common stock is greater than $14.35 for the 30
consecutive trading days prior to the date of the Companys conversion notice.
Toreador may also elect to prepay the Notes at any time for the outstanding principal
amount plus a 2% premium and accrued and unpaid interest and the issuance of warrants
exercisable into the same number of shares of common stock as the Notes were convertible
into before the prepayment and retirement of the Notes at an exercise price equal to the
conversion price immediately prior to the prepayment and retirement of the Notes. The sale
was made to accredited investors pursuant to Rule 506 promulgated pursuant to the
Securities Act of 1933, as amended. We intend to use the net proceeds of the offering to
accelerate our oil development program in Frances Paris Basin and for general
corporate purposes.  We are prohibited from paying cash dividends on the common stock without the approval of the holders of a majority of the then outstanding Notes.

In
addition, in July 2004, pursuant to our engagement letters with our investment bankers, we
issued to our investment bankers warrants exercisable into an aggregate of 40,000 shares
of common stock at an exercise price of $8.20 per share. The warrants were issued to
accredited investors pursuant to Rule 506 promulgated pursuant to the Securities Act of
1933, as amended.

ITEM 3  DEFAULT
UPON SENIOR SECURITIES  None

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None

ITEM 5  OTHER INFORMATION
 None

ITEM 6  EXHIBITS

(a)    
          The following exhibits are included herein:

|2.1 | - | Agreement for Purchase and Sale by and among Toreador Resources Corporation and Tormin, Inc., as Sellers, and Black Stone Acquisitions Partners I, L.P., as Buyer, dated December 17, 2003 (previously filed as Exhibit 2.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on January 28, 2004, File No. 0-2517, and incorporated herein by reference).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

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|3.1 | - | Amended and Restated Certificate of Incorporation, of Toreador Resources Corporation (previously filed as Exhibit 3.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
|--- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 | - | Second Amended and Restated Bylaws of Toreador Resources Corporation (previously filed as Exhibit 3.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
|--- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.3 | - | Certificate of Designation of Series A-1 Convertible Preferred Stock of Toreador Resources Corporation, dated October 30, 2002 (previously filed as Exhibit 3.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-2517, and incorporated herein by reference).
|--- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.1 | - | Purchase Agreement, dated July 20, 2004, executed by and between Toreador Resources Corporation and each of the investors specified therein (previously filed as Exhibit 10.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2004, File No. 0-2517, and incorporated herein by reference).
|---- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 | - | Form of 7.85% Convertible Subordinated Note (previously filed as Exhibit 10.2 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2004, File No. 0-2517, and incorporated herein by reference).
|---- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|31.1* | - | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------

|31.2* | - | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------

|32.1* | - | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* Filed herewith.

24

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SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.

|                  |  | TOREADOR RESOURCES CORPORATION,Registrant        
|----------------- |  | -------------------------------------------------
|                  |  |                                                  
|November 15, 2004 |  | /s/ G. Thomas Graves III                         
|                  |  | G. Thomas Graves III                             
|                  |  | President and Chief Executive Officer            
|                  |  |                                                  
|November 15, 2004 |  | /s/ Douglas W. Weir                              
|                  |  | Douglas W. Weir                                  
|                  |  | Senior Vice President and Chief Financial Officer

25

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EXHIBITS INDEX

|Exhibit Number |  | Description
|-------------- |  | -----------

|2.1 | - | Agreement for Purchase and Sale by and among Toreador Resources Corporation and Tormin, Inc., as Sellers, and Black Stone
Acquisitions Partners I, L.P., as Buyer, dated December 17, 2003 (previously filed as Exhibit 2.1 to Toreador Resources Corporation
Current Report on Form 8-K filed with the Securities and Exchange Commission on January 28, 2004, File No. 0-2517, and incorporated
herein by reference).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1 | - | Amended and Restated Certificate of Incorporation Toreador Resources Corporation (previously filed as Exhibit 3.2 to Toreador
Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by
reference).
|--- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 | - | Second Amended and Restated Bylaws of Toreador Resources Corporation, (previously filed as Exhibit 3.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
|--- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.3 | - | Certificate of Designation of Series A-1 Convertible Preferred Stock of Toreador Resources Corporation, dated October 30, 2002 (previously filed as Exhibit 3.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-2517, and incorporated herein by reference).
|--- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.1 | - | Purchase Agreement, dated July 20, 2004, executed by and between Toreador Resources Corporation and each of the investors specified therein (previously filed as Exhibit 10.1 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2004, File No. 0-2517, and incorporated herein by reference).
|---- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 | - | Form of 7.85% Convertible Subordinated Note (previously filed as Exhibit 10.2 to Toreador Resources Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2004, File No. 0-2517, and incorporated herein by reference).
|---- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|31.1* | - | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------

|31.2* | - | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------

|32.1* | - | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* Filed herewith.

26

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